Forecast

GE in talks with French nuclear developer

Staff and wire reports
| on May 20, 2014

General Electric is continuing its effort to persuade the French government that its $16.9 billion offer for Alstom's energy division would benefit all parties, and now it is starting talks with nuclear-plant maker Areva and other French companies about asset sales or partnerships, people familiar with the matter said.

Bloomberg News reported that GE is waiting for the French government to say if it must sell assets to get the deal done, said the people, who asked not to be identified because details are private.

Fairfield-based GE is exploring concessions, including entering ventures in areas from nuclear power to wind-turbines to rail signaling, while it seeks clarification on what would appease the state, Bloomberg reported.

In an April 29 letter to French President Francois Hollande, GE CEO Jeffrey Immelt said GE would respect "the sovereign character" of France's nuclear industry and consider local partners in energy and rail equipment.

"We continue to talk to potential French investors as outlined in Jeff Immelt's letter to the French government," said GE spokesman Seth Martin.

France last week bolstered its ability to block foreign takeovers, adding risk to GE's pursuit of Alstom as Immelt works to return the company to its industrial roots and de-emphasize financial services.

The discussions between GE and French companies are part of political maneuvering, said Brian Langenberg, principal in Langenberg & Co., commenting that GE's real goal remains the purchase of the Alstom division.

French companies have been contacting GE in anticipation of the government asking for asset sales or partnerships before approving the deal, though GE would prefer not to sell anything, a person told Bloomberg. The U.S. company is holding talks because it's willing to be flexible, the person said.